LFP076 – Convergence: Insuretech/MGAs as an Example of Straddling Old & New FS with Charlie Blackburn CTO Azur

Do you have to be either “a Fintech” or “an incumbent”? Increasingly as #newFS and #oldFS converge this duality becomes less meaningful and its more about how well FS players young and old are embracing both “digital” per se as well as the business model changes it both implies and enables.

Azur is a great example of this trend. As an “MGA” (more on that anon) they fit into a well-established “old” category of the insurance industry. They are a comparatively new company whilst part-owned by a global giant. And they certainly “get” the digital thing in terms of both “tech” and also “business model changes”.

In LFP074 Andy Rear of the reinsurer MunichRe discussed with us their concept of reinsurance as a service. Put simply the ability to, as it were, just plug into the wall for your electricity/reinsurance – which then leaves InsureTechs able to do everything they might want and avoid falling into a regulatory net and needing a gazillion dollars of capital. Andy said that the key to the future were MGAs – Managing General Agents – but we barely skinned the surface on them

So here we are diving into MGAs and in the interests of brevity lets jump into the topics we discuss:

MGA – Managing General Agents – phrase having slightly different meanings in different markets. In essence a specific type of organisation that has underwriting authority (&processing claims) given to them by an insurer, focusing on specialty niches

MGAs fit between insurers and brokers

Azur’s initial book (from AIG) is HNWI – £25m in premia

MGAs cf hedge funds

the advantage of MGAs to insurers

outsourcing of innovation in Pharma cf outsourcing of niche areas in insurance

the importance of independence neither being tied to brokers or insurers

FCA regulated (&cf the PRA leaving the FSA for the BoE)

the advantage of regulated industries for startups

do boxes like “insuretech” “incumbent” have any real meaning as time goes by

convergence

the central importance of managing tech debt in keeping ahead rather than falling behind

the potentially short lifetime of new systems

building a sustainable Fintech/InsureTech

dealing with offers if one is successful – the importance of not going too early

naming Azur

Azur are B2B, and always looking to do more deals, add more products with both the insurance market and brokers